Washington Alert-Part II

…IRS’s Taxpayer Protection Program unequivocally improves identity theft detection, the Treasury Inspector General for Tax Administration (TIGTA) said in a recent audit. (Audit Report No. 2013-40-062) As described in the audit, the program reviews tax returns that are proactively identified by IRS as potential identity theft and stops fraudulent refunds before they are issued. For example, in 2012, the program identified some 325,000 tax returns that involved identity theft and prevented fraudulent tax refunds totaling $2.2 billion, the audit said. However, controls related to program data, cases worked and training are “insufficient,” it said. “The Taxpayer Protection Program is important to the IRS’s efforts to combat tax refund fraud and help victims of identity theft receive their refunds,” said J. Russell George, the inspector general. “While the program has yielded some favorable outcomes, more needs to be done to strengthen program controls,” he added. The audit is available here.

…IRS has published a list of tips regarding special tax benefits that apply to members of the armed forces serving on active duty. (IRS Summertime Tax Tip 2013-06) “These rules can help lower your federal taxes and make it easier to file your tax return,” the agency said. Among the tips on the IRS list are those related to tax deadline extensions; the combat pay exclusion; the earned income tax credit; the moving expense deduction; the uniform deduction; and signing joint tax returns. The tax tips are located here.

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